Thrashers' ownership tale full of twists, turns

Nearly seven years ago, nine smiling businessmen -- collectively known as Atlanta Spirit -- stepped forward as new owners of the Hawks, Thrashers and Philips Arena. They had big plans.

Their relationship has devolved into a lawsuit among the owners, another against a prominent Atlanta law firm and, at least for now, with the Thrashers on the brink of moving out of town because of massive financial losses.

Today, there are seven men in charge, and it was the process of trimming one member that led to the lawsuits. The Hawks and Thrashers stand in very different places.

The Hawks are on the verge of their fourth consecutive playoff appearance. They have an improved record each of the past five years -- the only team in the NBA with such a distinction. They have strung together 14 consecutive winning months.

After undergoing a major roster rebuild, which started in earnest in 2004, they have a young nucleus and a five-time All-Star in Joe Johnson. Ironically, it was Johnson who was the central figure in the original ownership dispute.

The Thrashers could be sold and moved as there is now a “sense of urgency,” according to co-owner Michael Gearon Jr., for a buyer or investors to step forward. It would be the second time in 30 years that Atlanta has lost an NHL franchise. The owners say they can no longer pay millions of dollars in lossesthe team has the second lowest payroll in the league.

“My perception of what the fan base thinks is they are tired of the bickering,” said season-ticket holder Chris Ciovacco said. “They are tired of paying lawyers and having one of the smallest payrolls in the league.”

Just how did the Thrashers get here?

The Atlanta Spirit officially took ownership of the franchises and arena March 31, 2004. The group was put together in a matter of days after Time Warner’s long effort to sell to Dallas businessman David McDavid could not be completed.

McDavid would accuse Time Warner executives of breaking an oral contract and sharing his confidential financial information with the Spirit. After an eight-week trial, a jury awarded McDavid $281 million -- nearly three times the $96 million he agreed to pay for the teams and the arena rights -- in December 2008. The company withdrew its appeal of the award last August.

The Atlanta Spirit said its sole goal was to keep the teams in Atlanta and build them into consistent winners. The original group consisted of Gearon Jr., Michael Gearon Sr., Rutherford Seydel, Bruce Levenson, Ed Peskowitz, Steve Belkin, Todd Foreman, Bud Seretean and Beau Turner. Belkin, whose 30 percent stake was the largest of any individual in the group, was bought out in December after a lengthy lawsuit that started in 2005 when he questioned the Hawks' acquisition of Johnson. (Seretean had earlier sold his holdings.)

Following the lockout that claimed the 2004-05 season, the owners hoped an improved economics system would help. Still in need of help to offset financial losses, any chances of finding it were lost by the lawsuit that followed the attempt to buy out Belkin. It was unlikely a buyer or investor would step forward when the title to the team was in question.

As the lawsuit was litigated, the owners made several cash infusions into the franchises to cover losses. Belkin, one of the group's deepest-pocketed members, did not contribute to any cash calls during the five-year legal process. Once the process reached the point where Belkin had to pay his share of the losses, the parties agreed on the buyout.

The Atlanta Spirit filed a lawsuit against Atlanta law firm King & Spalding in January, claiming the firm “botched” the deal to buy out their former partner. According to the documents in the $200 million suit, the group lost $14.5 million in legal fees, $50 million in lost value of the franchise and $150 million in losses during the five-year legal battle.

“We are close to being at the end of the line,” Gearon Jr. said. “I don’t want to see the team move. I have no interest in seeing the team move. I have no interest in selling my ownership interest in the team. I’m prepared to lose money to have the team here. But it’s impossible to have a couple of guys continue funding $35 million annual commitments.”

The latest lawsuit revealed the owners have been trying to sell the Thrashers since shortly after the purchase was completed. Before that, it was revealed that an investment company was hired to seek a buyer or investors for the Thrashers, Hawks or both teams.

Long-standing rumors have said the Thrashers would be sold and moved, with Canadian cities Winnipeg, Quebec City and Hamilton the often mentioned destinations. Team officials have said that the Thrashers could have been sold several times over the past two years if relocation had been the goal. While the threat of moving exists, NHL commissioner Gary Bettman said this week in a conference call with reporters that “as we converse right now, there are no plans to do anything with that franchise.”

A point of frustration for Thrashers fans has been the parade of players who have left in recent years. For a variety of reasons, All-Star players such as Dany Heatley, Marc Savard, Marian Hossa and Ilya Kovalchuk and top draft picks such as Braydon Coburn are gone. It has been a long rebuilding process since the team’s only postseason appearance in 2006-07.

This season has seen big change and high hopes. The management structure was altered, and Don Waddell, the only general manager in the history of the franchise, was moved to president. Rick Dudley took Waddell’s spot.

A new coaching staff, led by Craig Ramsay, and several new players were brought in after the team finished five points out of a playoff spot last season. Included in the group of new players were four from last season’s Stanley Cup-champion Chicago.

The Thrashers are challenging for a playoff spot with two months left in the season. It is reason for optimism for some.

Ciovacco, his wife and fellow season-ticket holder Jaime Henderson started in an effort to garner support to keep the Thrashers in Atlanta.

“I think if you are a real fan you see that the on-ice product is much better than the casual fan understands,” Ciovacco said. “That’s the shame of it, if the team ends up in Winnipeg, in three years we could see them win the Stanley Cup. We will regret watching Dudley, Ramsay and [rookie Alexander] Burmistrov holding the Stanley Cup. We’ll say ‘That should have been us.’”